Major Whistleblower Law Development: False Claims Act Correction Act Is Approved by Senate Judiciary Committee

Today saw a major development that could affect every whistleblower, whistleblower attorney, and whistleblower case involving the False Claims Act, the nation’s primary whistleblower law. The U.S. Senate Judiciary Committee today approved new legislation to restore the False Claims Act to its originally intended strength, by eliminating a series of “loopholes” that dishonest government contractors had used to avoid liability.

Our whistleblower lawyer blog has written extensively about the False Claims Act, the qui tam statute that allows private citizens to report fraud as whistleblowers or “relators,” and to share in the government’s recovery of damages. We have followed the development of the new whistleblower law amendments, the False Claims Act Correction Act (S. 2041), since it was introduced last September by a bipartisan group of Senators (Grassley, Durbin, Leahy, and Specter).

The advocacy group Taxpayers Against Fraud (with which I am proud to be associated) describes the new law as “A Better Rat Trap” designed to put more “snap” into the False Claims Act, and summarizes its key provisions as follows:

–to clarify that False Claims Act liability protects all federal funds;

–to solely vest the Government with the power to dismiss whistleblower- filed False Claims Act lawsuits that are based on public allegations;

–to remove confusion over the statute of limitations period;

–to explicitly clarify that the False Claims Act applies to those who discover an overpayment and decide to pocket the funds; and
–to provide strengthened employment protection for whistleblowers.

According to Jeb White, President of Taxpayers Against Fraud, “[t]his is common sense legislation that we expect to sail through the House and Senate. . . . It’s hard to be opposed to building a better rat trap to catch corporate cheats, chiselers, and con artists.”

The bill passed the Judiciary Committee overwhelmingly, and moves forward in the legislative process.

We congratulate everyone who had a part in moving the new law forward, so that these loopholes for dishonest contractors may finally be closed.